Wolfowitz to Depart World Bank

Topics:

May 19, 2007

Paul D. Wolfowitz, president of the World Bank, on Thursday night announced his decision to resign following a weeks-long ethics controversy.

According to the New York Times:

The decision
came four days after a special investigative committee of the bank
concluded that he had violated his contract by breaking ethical and
governing rules in arranging the generous pay and promotion package for
Shaha Ali Riza, his companion, in 2005.

The
resignation, effective June 30, brought a dramatic conclusion to two
days of negotiations between Mr. Wolfowitz and the bank board after
weeks of turmoil. …

Do You Know What You're Worth?

People close to the negotiations said that Mr. Wolfowitz had agreed not
to make major personnel or policy decisions between now and June 30.

Meanwhile, the Washington Post reported this:

The
ethics scandal that ultimately brought down Wolfowitz was merely the
latest in a long list of his infractions in the eyes of many staff
members, who accused Wolfowitz of insulating himself behind tyrannical
aides, disregarding the counsel of veteran bank officers and running
the bank as an adjunct of the Bush administration. …

Under a tradition dating to the creation of the World Bank in
the 1940s, the U.S. president nominates its head, even though that rule
is contained nowhere in the bank’s governing statutes. Under the same
unwritten agreement, Europe gets to pick the head of the bank’s
affiliate institution, the International Monetary Fund. For years,
reformers have questioned this system, asserting that the heads of such
important global institutions should be selected on merit. Many
academics and pressure groups are demanding that the end of Wolfowitz
mark the beginning of a new selection procedure.

With its chosen head of the bank forced out by an ethics
scandal, the Bush administration moved yesterday to reassert the
traditional U.S. role, with Treasury Secretary Henry M. Paulson Jr.
declaring he would "move quickly to help the president identify a
nominee to lead the World Bank going forward."

But several senior bank officials said last night that the
institution requires an acting president until a new president is in
place, dismissing out of hand the suggestion that Wolfowitz could
continue to come to work as usual.

"He will be treated like a leper," said an official, who
requested anonymity so as to speak candidly. "No one, certainly not
heads of agencies, are going to want to meet with him. He instantly
becomes irrelevant to the bank from this point on."

A bank official briefed by board members said the board would
today issue a second statement asserting that Wolfowitz is immediately
barred from making personnel and policy decisions, assuaging the fears
of some that he might otherwise fire those who have rallied against
him. But in a nod to the interests of the Bush administration, the
board will assert that Wolfowitz is to stay on officially in his post
and will not go on administrative leave, as many staff members had
hoped.

Absolute Power Corrupts Absolutely?

The Wolfowitz debacle smacks of too much power–it’s almost as if
all the power went to Wolfowitz’s head. Dabbling in your
honey’s salary and career is a bad move wherever you work, and
particularly if you’re the chief of a high-profile institution such as
the World Bank.

Having lived in Washington for almost seven years, I’ve encountered
this inflated sense of power among some politicos and their cronies,
who act more like royalty than public servants. And while I’ve never
met Mr. Wolfowitz, all the news seems to suggest he was operating above the law.

The decision to keep him in office for the next six weeks is, I
think, bad for morale at an institution that’s been battered enough. I
can’t imagine he relishes the idea of working amid people filled with
contempt for him, either.

Going forward, I think our leaders should be open to the idea of a
different selection process for the World Bank president, perhaps one
based on merit.

The World Bank, an institution with the potential to do so much
good, shouldn’t again be ensnared in a web of vitriol and bickering.